The Federal Reserve, created by Congress over 100 years ago, is often described as independent within our political system. In a new book, “The Myth of Independence: How Congress Governs the Federal Reserve,” Sarah Binder, a senior fellow at Brookings and a professor of political science at George Washington University, and Mark Spindel, founder and chief investment officer at Potomac River Capital, challenge that myth. Instead, they argue that Congress and the Federal Reserve are interdependent institutions. The Fed sets monetary policy subject to political constraints—a relationship that shapes politics, the economy and financial markets.

On October 25, the authors shared their views at the Hutchins Center on Fiscal and Monetary Policy at Brookings. Laurence Meyer, a Fed governor from 1996 through 2002 and now a private economic consultant, Randall Kroszner, a professor at the University of Chicago Booth School of Business and a Fed governor from 2006 to 2009, responded in a discussion moderated by CNBC’s Ylan Mui.